I know this is a huge debatable subject. Your opinion is largely based on your experiences I am sure. But here are my numbers based on my experiences. Please keep in mind that I know that Appraised values are not definitive values on the price of a home but if you are using similar recent sold comparable properties in your market area an appraisal should reflect a realistic market price on that home at the time of the sale and contract.
First and foremost some supporting claims:
There are a bunch of statistics that suggest that a properly marketed home by an experienced Real Estate agent can add thousands of dollars to a sales price. I know many people will discount NAR’s year after year claim that Realtor assisted sales are receiving 9% more for a home than a FSBO because it is data driven from a Real Estate board that serves it’s members ( the realtors). I get that. Let’s look at more data.
In 2017, an Automated Valuation Model (AVM) provider called Collateral Analytics along with a real estate professor at the University of San Diego took a close look at 1.2 million sales in 2016 & 2017.
What they found was pretty interesting. In short the FSBO sales on average had sales prices that were 5.5% less than the average agent assisted sale.
(For the whole article PDF email Dan)
But why the title of this article?
Here is my take on this debate. I have sold hundreds of homes and usually there is an appraisal done on the property. Typically I find that the contract price and the appraised price are almost the exact price with one exception. That exception is when I have represented a buyer wishing to purchase a FSBO. That is where the differences come into play.
That is where the 4, 7, 9, 11, 13 & 17% title comes from. That is the appraised value in percent over contract price (the price the buyer and seller has agreed on in the purchase agreement) that an appraiser has given the appraisal OVER the contract price.
Here is the interesting part. Each seller agreed to pay me, the buyers agent 3% of the contract price also.
Even in the lowest circumstance the FSBO has “lost” 1% of the potential sales price over what an agent would have likely charged them.Plus they did all the work during the process. The worst case scenario is the seller did not see 20% from the sale….
Are you really saving money? My statistics would suggest otherwise. If you are selling your home by yourself without the assistance of an experienced real estate agent because you wish to learn from the process, I totally understand that. If you are looking at it from a perspective where you are saving money, you might want to look at more data.
P.S. I am open to articles or evidence stating otherwise. If you have some, please send them my way! This article was created from data created from Inman.com, a subscription based informative website available to industry related professionals.